How Wikipedia Acts As a Market for Information

Before he founded Wikipedia, Jimmy Wales was a futures trader in Chicago. In his remarks at the Global Financial Leadership Conference in Naples, Florida, he described some of the ways the data-driven worlds of price discovery and the site he describes as providing “free access to the sum of all human knowledge” are the same:

“This is very similar in a way, even though we’re not talking about a market and a price system, there’s something very analogous to a decentralized system where you push the decision making out to the end points. The world would be a very different place if the Chicago Mercantile Exchange were the place where farmers sent their crop estimates and you just simply have experts who decide the price and you tell everybody the price. Instead, it’s all the individual decision-making coming through a system that actually works much much better.”

Wales was careful not to compare financial markets and Wikipedia directly, but described how Austrian economist Friedrich Hayek’s article, “The Use of Knowledge in Society” inspired him to make the transition to create his site, which is now available in 270 languages and gets 490 million visitors monthly.

According to the Wikipedia entry on the article:

a centrally planned market could never match the efficiency of the open market because any individual knows only a small fraction of all which is known collectively. A decentralized economy thus complements the dispersed nature of information spread throughout society.

With contributors around the world providing information to its more than 20 million articles, Wikipedia represents a decentralized economy for neutral information, according to Wales.

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